Good-bye To Everything!

For the first half hour on that fateful Thursday, stock prices were steady.

Whitney’s gesture turned fear into faith. The Big Bull was not dead yet! Speculators everywhere rushed to catch the new advance. Within the hour, 200,000 shares of steel went at 205, General Electric rebounded 25 points, Radio 14, Montgomery Ward 24, A.T.&T. 24. The losing lady aboard the Berengaria recouped all but $40,000 of her losses by buying low on the revival. By 3 P.M. , when an impassive William Crawford struck the gong and ended trading, all but three billion dollars of the day’s losses had been recovered.

But the Bull’s frantic retreat had trampled thousands of small speculators before the bankers had been able to lash him forward again. One of the prime reasons for the morning’s vertical decline was the placement of countless stop-loss orders by brokers—orders calling for shares to be sold when their price dipped to a specified minimum. The brokers had to protect themselves when customers were unable to come up with more collateral for shares they had bought on margin. Each of these sell-out orders dumped more blocks of securities into the market, driving prices down to another dumping point. Each cascade carried countless hopes and dreams of opulence into oblivion. One broker told a Times reporter how he had been forced to sell out his closest friend.

In Seattle, Arthur Bathstein, secretary of a finance company, shot himself. In New York, realtor Abraham Germansky disappeared. He was last seen walking numbly down Wall Street, shredding a piece of ticker tape. Days later, he turned up in a sanitarium. One customer’s man told Edwin Lefèvre of a small trader who saw his life savings, $2,500—which he had pushed to $7,000—vanish on a second margin call. He went home and turned on the gas. Many who had been sold out sat dazedly in brokers’ offices still watching the lagging ticker, which did not finish its toll of the day until 7:08. Others sought consolation in Wall Street speakeasies, which did a roaring business.

In brokers’ offices also, business was roaring far into the night. A total of 12,894,650 shares had changed hands—a record which utterly overwhelmed the market’s ordinary machinery. Western Union reported that its cable and telegraph departments were swamped. Lights blazed in many offices until 5 A.M. Just across the river in Brooklyn, the St. George Hotel had 2,632 rooms occupied, and turned away hundreds. Many clerks—and their bosses—slept on their desks. Messengers and board-room boys, also kept on duty, wandered the streets in such unruly numbers that the police had to be called to control them.

In London, during these same hours, a wild scene erupted in Shorters Court, where dealers in AngloAmerican securities gathered after the London Stock Exchange closed at 4 P.M. Like New York’s old Curb Exchange, this was an open-air market, and there was a heavy rain falling when the news from Wall Street arrived. Ignoring the weather, frantic brokers milled about in the downpour, bawling, “Nickels sell,” “Columbias sell,” “Tractions sell,” while prices plummeted.

Meanwhile, on Wall Street, other brokers were trying to keep the Bull alive. At Hornblower & Weeks there was a midnight meeting of representatives from thirty-five top firms; among them they handled seventy per cent of the Exchange’s stock transactions. They agreed to tell customers in their market letters that selling had been “greatly overdone” and that the market was “fundamentally sound.” Hornblower & Weeks announced that it was republishing in eighty-five newspapers an ad it had first run in 1926: “We believe present conditions are favorable for advantageous investment in standard American securities.”

But these same brokers’ offices sent out a vast flood of margin calls. Everyone waited, with nerves more than a little ragged from uncertainty and lack of sleep, for the next day’s trading to begin. Grover Whalen dispatched no less than four hundred extra policemen and one hundred detectives to the financial district. Sight-seeing buses rerouted their tours to “see the excitement on Wall Street.” But there was no excitement. One reporter said the brokers returned to the floor on Friday morning with the calm of “veteran troops marching back to rest billets from the front lines.” Many had red eyes and sallow faces, but reports that the bankers were standing firm, and had been joined by George F. Baker of the First National Bank, did much to steady the market. From the White House, on October 25, President Herbert Hoover issued a statement that “the fundamental business of the country, that is production and distribution of commodities, is on a sound and prosperous basis.”